Brazil's Braskem closes on $200 million credit facility

By Reshmi Basu

New York, June 24 - Braskem SA said it has completed a $200 million credit facility to help refinance its debt and extend maturities.

The facility is comprised of two tranches. The first is for $145 million with a three and a half year maturity and an interest rate of Libor plus 350 basis points. The second tranche is for $55 million with a five year maturity and an interest rate of Libor plus 450 basis points.

Braskem said the export pre-payment facility was upsized to $200 million from $125 million because of strong demand.

The lead arrangers were Calyon New York Branch and WestLB AG New York.

The company said the facility would allow it to pay back $221 million notes due in July and October. Also, Braskem will extend the average tenor of its debt to 2.7 years at a "competitive" cost that is less than its current average of 8½%.

Braskem said the facility will also reduce its foreign exchange rate risk and allow it to distinguish itself in the international bank trade finance market, providing an alternative finance mechanism for its import and export flows. Braskem has annual export flows of $600 million.

"Braskem reaffirms its commitment to prioritize the use of its cash flows for the repayment of debt, as it continues to reduce the cost and increase the average tenor of its debt through operations designed to reduce its foreign exchange rate risk," said Paul Altit, vice president of finance and investor relations, in a news release.

Sao Paolo-based Braskem is Latin America's biggest petrochemical company.

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